Medicare Extends, Expands Physician MACRA Flexibility

Rich Daly, HFMA Senior Writer/Editor

The new flexibility is expected to increase the number of clinicians excluded from quality-reporting requirements under MACRA from 700,000 in 2017 to 834,000 in 2018.

June 21—Federal
rules implementing the second year of Medicare’s physician payment overhaul would greatly expand physician reporting flexibility from the first year.

The Centers for Medicare & Medicaid Services (CMS) offered several initiatives to minimize the short-term physician impact of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), including expanding reporting exemptions to include physician practices with less than $90,000 in
Medicare revenue or fewer than 200 unique Medicare patients. The 2017 waiver applied to practices earning $30,000 or less from Medicare or that had fewer than 100 Medicare patients.

“We believe that these additional flexibilities and reduction in barriers will further enhance the ability of small practices to participate successfully” in MACRA’s Quality Payment Program (QPP), CMS officials wrote in the proposed rule.

Of the two physician payment tracks created by MACRA, most of the relaxed rules would apply to the Merit-based Incentive Payment System (MIPS)—under which the vast majority of clinicians will be paid in the early years—rather than to advanced Alternative Payment Models (APMs).

The additional year of relaxed MACRA implementation followed “feedback … from many small practices that challenges still exist in their ability to participate in the program,” CMS officials wrote.

“This added flexibility for small practices will provide much-needed relief and flexibility as they gain experience in the changing payment environment,” Jack Ende, MD, president of the American College of Physicians (ACP), said in a written statement.

Chris Stanley, MD, director of healthcare strategy for Navigant, highlighted the “significant” expansion of the MIPS reporting exclusion but noted it merely adds to the total excluded from 2017 reporting. The proposed rule would exclude 134,000 additional clinicians from MIPS
reporting in 2018, according to CMS, while about 700,000 clinicians already were excluded in 2017.

The rule appears focused on making MACRA implementation “much, much easier for small practices, and rural practices as well,” Stanley said in an interview.

Hospital advocates and advisers also praised the additional flexibility. Chad Mulvany, director of healthcare finance policy, strategy and development, for HFMA, noted that the Association had urged the creation of virtual groups, an increase in low-volume exclusion thresholds, and implementation
of a quality-scoring methodology that incorporates both performance and improvement. The last element, like the first two, was included in the proposed rule.

The proposed rule addressed a number of concerns previously raised by organizations representing physicians, said Gayle Lee, JD, director of health care affairs for the Association of American Medical Colleges.

“CMS includes proposals that decrease burden, add flexibility, and allow for additional time to transition under the quality payment programs,” Lee said in a written statement.

Tom Nickels, executive vice president of the American Hospital Association (AHA), members of which employ or contract with 500,000 physicians, hailed CMS’s proposal for a facility-based clinician-reporting option “that may promote better alignment and collaboration on efforts to
improve quality among hospitals and clinicians.”

ACP’s Ende praised the inclusion of more flexible reporting options for the 2018 performance year that allow for the continued use of 2014 certified electronic health record (EHR) technology and that provide bonuses for fully adopting the 2015 certified systems.

The rule’s proposal to extend the use of modified Stage 2 meaningful-use requirements through 2018 will “provide much-needed relief from unrealistic, unfunded mandates for EHR capabilities,” Nickels said in a written statement. “We will encourage CMS to provide the same relief to hospitals.”

APM Impacts

The rule also would change some provisions of MACRA’s APM track, with CMS projecting the changes to increase physician participation from an estimated 2017 range of 70,000-120,000 to a range of 180,000-245,000 in 2018. Rather than the extensive reporting requirements and the potential for
payment cuts that physicians face under MIPS, physicians who sufficiently participate in APMs automatically qualify for an annual 5 percent bonus.

The increase in APM participation was expected to stem from the launch of new qualifying APMs in 2018, such as the Medicare ACO Track 1+, and the reopening of applications for existing APMs, such as the Next Generation ACO.

The rule would extend the lower nominal financial-risk standard for two additional years, slow the phase-in of risk-standard increases for medical home models, and allow practices in the Comprehensive Primary Care Plus model to qualify as APMs regardless of their affiliation with a larger
organization.

“These policies are important to encourage physicians to transition into the APM pathway in the early years of QPP,” Ende wrote.

Hospital Provisions

CMS also would add facility-based cost and quality performance measures under MIPS for clinicians who primarily work in a healthcare facility. The proposal was aimed principally at clinicians who practice mostly in a hospital, according to the rule.

“We continue to see that soften in a good way where there’s an understanding of the difference from hospital-based or facility-based providers—especially those that are not patient-facing—and that they should not be treated the same as an ambulatory physician who generally has more autonomy and control,”
Stanley said.

Maryellen Guinan, a senior policy analyst for America’s Essential Hospitals (AEH), agreed that the provision would promote better coordination and alignment between hospitals and clinicians.

An optional facility-based scoring mechanism, based on the Hospital Value Based Purchasing (VBP) program, would allow facility-based clinicians who perform at least 75 percent of their services in the inpatient setting to convert their hospital’s Total Performance Score under VBP into a
MIPS score, according to a CMS
fact sheet.

Nickels also hailed the “additional opportunities for clinicians to earn incentives for partnering with hospitals to provide better quality, more efficient care through advanced alternative payment models.”

AEH, which represents safety-net hospitals, also commended the proposal to incorporate a Complex Patients Bonus as part of the MIPS score.

“But we feel that there’s more to be done in terms of CMS accounting for social risk factors in the program overall—in terms of the risk adjustment of both the measures that are in the program and the scoring methodology itself,” Guinan said in an interview

Cost Concern

One area of the 1,058-page rule that raised early concerns was CMS’s plans to continue to weigh cost performance at zero in the calculation of MIPS scores in 2018. The provision could adversely impact practices that have shifted approaches from episodic payments to those that
focus on the overall cost of care.

“Those that have made those shifts or changes, and continue to do so, are not recognized whenever the cost piece is set at 0 percent,” Stanley said. “It’s a little bit of a concern that those who have focused on what’s right to do for the patient and overall value are maybe not going to be
recognized as much as they clearly should have been at this point.”

However ACP praised the proposal to zero out the category for 2018 and reweight the other MIPS performance categories.

Industry observers were closely watching the rule for signs of new directions that the U.S. Department of Health and Human Services would take under Secretary Tom Price, MD. Despite the increased physician flexibility, Stanley did not see the rule as a sign that the Trump
administration is moving away from value-based payment.

“We’re seeing it as breathing room to slow things down and not rush federal regulations down onto providers without understanding the complexity that comes into that for physicians in every state—whether they are a small practice or a large practice,” Stanley said.

The new flexibility is expected to increase the number of clinicians excluded from quality-reporting requirements under MACRA from 700,000 in 2017 to 834,000 in 2018.

June 21—Federal
rules implementing the second year of Medicare’s physician payment overhaul would greatly expand physician reporting flexibility from the first year.

The Centers for Medicare & Medicaid Services (CMS) offered several initiatives to minimize the short-term physician impact of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), including expanding reporting exemptions to include physician practices with less than $90,000 in
Medicare revenue or fewer than 200 unique Medicare patients. The 2017 waiver applied to practices earning $30,000 or less from Medicare or that had fewer than 100 Medicare patients.

“We believe that these additional flexibilities and reduction in barriers will further enhance the ability of small practices to participate successfully” in MACRA’s Quality Payment Program (QPP), CMS officials wrote in the proposed rule.

Of the two physician payment tracks created by MACRA, most of the relaxed rules would apply to the Merit-based Incentive Payment System (MIPS)—under which the vast majority of clinicians will be paid in the early years—rather than to advanced Alternative Payment Models (APMs).

The additional year of relaxed MACRA implementation followed “feedback … from many small practices that challenges still exist in their ability to participate in the program,” CMS officials wrote.

“This added flexibility for small practices will provide much-needed relief and flexibility as they gain experience in the changing payment environment,” Jack Ende, MD, president of the American College of Physicians (ACP), said in a written statement.

Chris Stanley, MD, director of healthcare strategy for Navigant, highlighted the “significant” expansion of the MIPS reporting exclusion but noted it merely adds to the total excluded from 2017 reporting. The proposed rule would exclude 134,000 additional clinicians from MIPS
reporting in 2018, according to CMS, while about 700,000 clinicians already were excluded in 2017.

The rule appears focused on making MACRA implementation “much, much easier for small practices, and rural practices as well,” Stanley said in an interview.

Hospital advocates and advisers also praised the additional flexibility. Chad Mulvany, director of healthcare finance policy, strategy and development, for HFMA, noted that the Association had urged the creation of virtual groups, an increase in low-volume exclusion thresholds, and implementation
of a quality-scoring methodology that incorporates both performance and improvement. The last element, like the first two, was included in the proposed rule.

The proposed rule addressed a number of concerns previously raised by organizations representing physicians, said Gayle Lee, JD, director of health care affairs for the Association of American Medical Colleges.

“CMS includes proposals that decrease burden, add flexibility, and allow for additional time to transition under the quality payment programs,” Lee said in a written statement.

Tom Nickels, executive vice president of the American Hospital Association (AHA), members of which employ or contract with 500,000 physicians, hailed CMS’s proposal for a facility-based clinician-reporting option “that may promote better alignment and collaboration on efforts to
improve quality among hospitals and clinicians.”

ACP’s Ende praised the inclusion of more flexible reporting options for the 2018 performance year that allow for the continued use of 2014 certified electronic health record (EHR) technology and that provide bonuses for fully adopting the 2015 certified systems.

The rule’s proposal to extend the use of modified Stage 2 meaningful-use requirements through 2018 will “provide much-needed relief from unrealistic, unfunded mandates for EHR capabilities,” Nickels said in a written statement. “We will encourage CMS to provide the same relief to hospitals.”

APM Impacts

The rule also would change some provisions of MACRA’s APM track, with CMS projecting the changes to increase physician participation from an estimated 2017 range of 70,000-120,000 to a range of 180,000-245,000 in 2018. Rather than the extensive reporting requirements and the potential for
payment cuts that physicians face under MIPS, physicians who sufficiently participate in APMs automatically qualify for an annual 5 percent bonus.

The increase in APM participation was expected to stem from the launch of new qualifying APMs in 2018, such as the Medicare ACO Track 1+, and the reopening of applications for existing APMs, such as the Next Generation ACO.

The rule would extend the lower nominal financial-risk standard for two additional years, slow the phase-in of risk-standard increases for medical home models, and allow practices in the Comprehensive Primary Care Plus model to qualify as APMs regardless of their affiliation with a larger
organization.

“These policies are important to encourage physicians to transition into the APM pathway in the early years of QPP,” Ende wrote.

Hospital Provisions

CMS also would add facility-based cost and quality performance measures under MIPS for clinicians who primarily work in a healthcare facility. The proposal was aimed principally at clinicians who practice mostly in a hospital, according to the rule.

“We continue to see that soften in a good way where there’s an understanding of the difference from hospital-based or facility-based providers—especially those that are not patient-facing—and that they should not be treated the same as an ambulatory physician who generally has more autonomy and control,”
Stanley said.

Maryellen Guinan, a senior policy analyst for America’s Essential Hospitals (AEH), agreed that the provision would promote better coordination and alignment between hospitals and clinicians.

An optional facility-based scoring mechanism, based on the Hospital Value Based Purchasing (VBP) program, would allow facility-based clinicians who perform at least 75 percent of their services in the inpatient setting to convert their hospital’s Total Performance Score under VBP into a
MIPS score, according to a CMS
fact sheet.

Nickels also hailed the “additional opportunities for clinicians to earn incentives for partnering with hospitals to provide better quality, more efficient care through advanced alternative payment models.”

AEH, which represents safety-net hospitals, also commended the proposal to incorporate a Complex Patients Bonus as part of the MIPS score.

“But we feel that there’s more to be done in terms of CMS accounting for social risk factors in the program overall—in terms of the risk adjustment of both the measures that are in the program and the scoring methodology itself,” Guinan said in an interview

Cost Concern

One area of the 1,058-page rule that raised early concerns was CMS’s plans to continue to weigh cost performance at zero in the calculation of MIPS scores in 2018. The provision could adversely impact practices that have shifted approaches from episodic payments to those that
focus on the overall cost of care.

“Those that have made those shifts or changes, and continue to do so, are not recognized whenever the cost piece is set at 0 percent,” Stanley said. “It’s a little bit of a concern that those who have focused on what’s right to do for the patient and overall value are maybe not going to be
recognized as much as they clearly should have been at this point.”

However ACP praised the proposal to zero out the category for 2018 and reweight the other MIPS performance categories.

Industry observers were closely watching the rule for signs of new directions that the U.S. Department of Health and Human Services would take under Secretary Tom Price, MD. Despite the increased physician flexibility, Stanley did not see the rule as a sign that the Trump
administration is moving away from value-based payment.

“We’re seeing it as breathing room to slow things down and not rush federal regulations down onto providers without understanding the complexity that comes into that for physicians in every state—whether they are a small practice or a large practice,” Stanley said.

HFMA RESOURCE LIBRARY

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